The stock market in the USA has become very expensive. A good indicator of this is the Total Market Capitalization/ Gross Domestic Product ratio. It's currently at over 129%, which is significantly overvalued. The highest it's ever been is 148%, so it's just 13% away from that. That was the biggest stock market bubble of all time and this year it's most likely that the Federal Reserve is going to increase interest rates. This will help drag down the market as a whole. I don't know if we'll see the market crash because I don't see a recession any time soon, but we could be in for a heavy correction until the actual recession hits.
So what should you do? I'm not dumping everything yet. But I'm definitely not buying anything! If certain stocks run in the coming year it would be a good idea to take some profits. I've heard of a number of legendary hedge fund managers who are 50% in cash right now.
If you haven't diversified abroad yet now might be a good time. I've put a good chunk of money into index funds that invest in everything BUT stocks in the United States. They're generally yielding higher dividends and have overall lower PE ratios.